Latest / The Retail Podcast / Ulta Beauty’s UK Launch, Target’s Back-to-School, Retail AI, Cannabis Drinks & Walmart’s Tween Fashion

Transcript

Ulta Beauty’s UK Launch, Target’s Back-to-School, Retail AI, Cannabis Drinks & Walmart’s Tween Fashion · The Retail Podcast

• 0:00
  Good morning, everybody, and welcome to Five Things Friday
• 0:17
  Thank you, Jill. I'm Alex.
• 0:19
  I'm from the world famous retail podcast is world famous now.
• 0:23
  We're now literally almost in every single continent was in
• 0:26
  Saudi Arabia yesterday, Singapore on Monday.
• 0:29
  It's it's global expansion. Global Baby.
• 0:33
  Yeah, and and it's all about helping people who sell to
• 0:36
  retail. All retailers understand what
• 0:39
  are the top five things happening in their region from
• 0:43
  amazing experts in the field who live and brew retail.
• 0:47
  There is no better example of that than the wonderful Jill
• 0:51
  Dover, SVP of Content, NRF. Jill, Hello.
• 0:53
  Hello. Oh, it's lovely to be back and
• 0:56
  thank. You lovely to have you back.
• 0:58
  So we're going to jump straight in because we want to try and
• 1:00
  keep this to 15 minutes all there or thereabouts.
• 1:03
  Not going to be LED. The first thing we're going to
• 1:05
  talk about is not Walmart tweens is Ulta Beauty.
• 1:09
  Yes, this I was so excited to see this about a week and a half
• 1:12
  ago. So as you know Alex, when you
• 1:14
  were in Singapore, the NRF big show, I had Josh Friedman with
• 1:18
  me who is the STP of digital for Ulta.
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  Now Ulta's was pretty much only domestic at that point, but a
• 1:24
  little birdie had told me there could be some plans in the
• 1:27
  works. So this was really exciting to
• 1:28
  see that Ulta bought a huge player in London, they and even
• 1:33
  Europe, and now they have about 83 stores that they're going to
• 1:38
  have now. It's huge, huge, huge.
• 1:40
  And that Keisha Steelman, their CEO, has said that international
• 1:43
  expansion was always going to be a big part of the Ulta Beauty
• 1:46
  Unleashed, which was kind of her plan when she took over the
• 1:49
  brand. They're world renowned and
• 1:51
  obviously in the US, Ulta Beauty have done a fantastic beauty
• 1:54
  within store, right? Because I think Ulta Beauty is
• 1:56
  within Target. They have some spaces, yes,
• 1:59
  within Target. It'll be interesting to see kind
• 2:01
  of, you know, how that plays out.
• 2:02
  But Ulta Beauty itself, there are many, many, you know,
• 2:05
  hundreds and hundreds of standalone stores.
• 2:08
  One thing they're really known for is the services they provide
• 2:11
  in store. So you know, you can kind of go
• 2:13
  and you know, do the makeover, but they can they test out the
• 2:16
  products for you. So if you want to see something
• 2:18
  on your hair or how see how powerful a blow dryer might be
• 2:22
  to combat the Singapore humidity, you know, that's
• 2:25
  something that they, that they do there and they do an
• 2:29
  unbelievable amount of local want to say it was something
• 2:33
  like 70,000 local events and all their stores kind of, you know,
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  global, every store really has kind of a neighbourhood feel,
• 2:43
  multiple events, even, you know, per week.
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  They're just getting kind of the community involved.
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  So it feels much more, you know, a place you can pop in and grab
• 2:53
  one thing rather than, oh, I have to go buy, you know, 500
• 2:57
  things to stock up. So they're really doing a great
• 2:59
  job in that in that play. I think, I think there's lots of
• 3:02
  good examples of beauty players that are just crushing it and
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  beauty as a category being a growth category, still a new
• 3:11
  entrance coming into this because I cover this, but
• 3:13
  anyway, talk so much. As we can spend more, yeah.
• 3:18
  OK, keeping on with Target, they're launching a a week
• 3:23
  inspired back to school campaign and it's all about basically
• 3:29
  major, major discounts. So when I look at it starts on
• 3:32
  the 27th of July to the August the 2nd, it's the kick off the
• 3:36
  back to school season. Deals include 25% of children's
• 3:39
  apparel, 30% of backpacks and pens, every writing supplies and
• 3:45
  they've also given $15.00 gift cards if you spend over $50 on
• 3:51
  home care items. So for me, that's a wonderful
• 3:53
  cross category play. Yeah, family is in buying
• 3:57
  something for the house. Oh, here's a $50 voucher for
• 4:02
  back to school, which I think which family wouldn't use that,
• 4:06
  right? Real money, Yeah.
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  It's actual real money, yeah. Yeah, and they're offering
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  personalization stores in nearly 500 stores.
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  This is doubling from last year because people, and I know what
• 4:17
  it's like having kids, you want to put their name on everything,
• 4:21
  tattoo it onto literally anything that you can tattoo it
• 4:25
  onto. It's interesting.
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  So the, the BOGO and all of the deals, I mean, back to school
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  shopping is unbelievable driver here, you know, at least in the
• 4:35
  US, you know, think we did a pulse.
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  It was about two weeks ago, so kind of early mid-july and it
• 4:42
  there was something like 84% of households still hadn't
• 4:46
  completed back. You know, they're back to school
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  shopping, which makes sense. The school really doesn't start
• 4:51
  some regions here early August, but K through 12, the average
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  that most households will spend is around $300.
• 5:00
  It's on electronics, then another 250 clothing and
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  accessories, then another 170 on shoes, and then another $143 on
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  school supplies. When you put all that together,
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  I mean, Target sells every single one of those categories.
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  They should be a major player in this space.
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  And, you know, kids love Target because what else do they have?
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  Toys. It's real like that.
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  That was always, you know, growing up, like they know the
• 5:29
  bullseye before they know the name and they want to go through
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  and buy. So, so here's the thing right
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  here. Here's what they have done
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  phenomenally well. I live in another continent,
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  right? My kids have never seen a
• 5:41
  target. You would think that, but thanks
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  to the power of Minecraft, thanks to the power of YouTube
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  and Targets, amazing social activations, my little boy,
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  every time he sees the bullseye target.
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  I mean, I've worked with Target, so I've bought some bullseyes
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  home for it, but he knows and he goes, oh, can we go to to Target
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  when we're in the US? Because that's what Youtubers,
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  you know, they go in and I don't know, grab everything off a
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  shelf in 5 minutes. Although I think, you know,
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  Target is having an incredibly difficult time now.
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  I can see that the influence that they've put into this sort
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  of new generation through things like YouTube stars definitely
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  having an implants and obviously this lends itself, this category
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  lends itself to silent influence.
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  I think is that is a nice way to look at it.
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  Exactly, yeah, they're, they're telling me where they want to go
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  to back to school shopping. So it's that's happening then
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  yeah, it's a real impact on the wallet, so.
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  So another, another interesting element to share is this whole,
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  you know, you and I have heard AI stories, you know, retailers
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  talking about we're going to use it in our back end, we're going
• 6:53
  to use it in our front end. There's been some great research
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  by Aquino. Di Nata did it for Aquino and
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  they found, they, they surveyed 3500 customers and they found
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  84% of shoppers who used AI generated product
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  recommendations, had positive experiences, which is great.
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  So the recommendation sort of was getting it right, but only
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  45% of shoppers then trusted the AI to be accurate in whatever it
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  was providing it back. So it was a positive experience.
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  But then there's that, I guess that cynicism is actually
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  accurate. And then actually, so, and then
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  only 44% engage with them to, to, to actually go on to make a
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  purchase. And I don't know what, what,
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  what, why there's a difference here, but there's a difference
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  by the people who engage and then the people who actually
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  made the purchase. That's 32%.
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  So I think AI in the shopping experience, apart from
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  recommendations, but in terms of influence discovery, insights,
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  the things that we've been saying, hey, look, you need to
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  be getting your data sets, you need to be getting those
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  signals, you need to be getting customer profiles integrated
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  into your customer channels. Otherwise you're going to end up
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  with this disjointed experience. I think some retailers are doing
• 8:15
  it really well. They don't talk about who and
• 8:17
  where and what the only do they mention any other retailers?
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  No, they don't. It just says that, yeah, no,
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  there, there, there's no sort of who is, they're not naming who's
• 8:28
  doing it right, but they are. They are saying that the the the
• 8:33
  the AI tools that retailers are. Yeah, I've got a lot of people
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  don't even know that's happening in the background, right.
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  You know when you start, when you start out in merchandising,
• 8:45
  you know you're doing cross sells and up sells manually
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  based on well this goes with this and outfit choices.
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  A lot of that now is being done by AI where it was done by a
• 8:54
  merchant who was sitting behind their computer.
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  So a lot of that kind of heavy lifting and work and then
• 9:03
  differences and tastes in the personal choice that should be
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  more than up to a merchandiser or two.
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  That should be up to based on what you've clicked on and what
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  you know. And it, it's always interesting
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  when I go, you know, example, shopping on Amazon, shopping for
• 9:20
  my kids for camp. I'm shopping for my husband for
• 9:22
  a vacation. And then I go and shop and I'm
• 9:25
  getting, oh, well, no, your size is, you know, 11 male.
• 9:29
  I'm like. Yeah.
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  So, you know, in a way, it's like we're sold the beginning
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  stages where you almost want to be able to choose a profile of
• 9:37
  this is Jill shopping, this is Jill shopping for her husband.
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  Don't. Get on profiles, I mean, yeah.
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  It's such a bigger issue than just are you getting further
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  along in the funnel? It's like you're intelligent,
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  but now I'm expecting you to be smart and you're so stupid.
• 9:53
  Yeah, I think for Crossland upsell, yes.
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  But like as you mentioned, sizing is a still so, so I mean
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  I've seen true fit, tried to fix the problem.
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  I've seen lots of different organisations try to fix the
• 10:08
  problem. But it's that there is no one
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  size category. So I think that's probably the
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  last element, which is the most important to you and I as
• 10:17
  shoppers, we want that fit. We want it to fit us when we get
• 10:21
  it, this leg. They definitely don't want me to
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  return it. I definitely don't want to
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  return it. It's it really is solving that
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  at the UX experience. I mean, I would say Amazon does
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  a pretty good job now. Nordstrom does a really good
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  job. You know, reviewers say this
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  item runs small. Reviewers say this item runs
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  large or Amazon says this is a frequently returned item.
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  I don't want to tell them, but I also then don't buy that item.
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  I'm like, OK, next. So you know you in a way you
• 10:52
  really need to think about what are you using this AI for?
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  Is it what's to inform so you don't have a return?
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  Because with Amazon, I'm sure that's what they're doing.
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  And sometimes they just say keep the item, here's your cash back,
• 11:05
  right? Well.
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  It's margin erosion, right? This is eroding your margin.
• 11:09
  And then what's fixing it? Yeah.
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  OK, so we're almost at the weekend and it's, well, it's
• 11:14
  Friday. So this one, I think, sort of
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  lends itself to that Friday feeling.
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  I love it. Big alcohol, although the lack
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  of alcohol, basically we're not drinking as much.
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  And the especially generationally, people are
• 11:29
  making alternative choices. So this news article is about
• 11:33
  specifically how drinks companies are looking at
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  cannabis drinks to try and revive sales that are lost to
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  the decline in in wines and beers.
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  I I think we just had Wimbledon over here and Tom Holland, Mr
• 11:50
  famous spider man Marvel Universe, it's his brand that
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  they launched. They had a massive activation at
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  Wimbledon again 0 alcohol. This is about people enjoying
• 12:00
  the flavour, the taste, the the whole ecosystem of drinking
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  without the the alcohol. And what's again, what's
• 12:08
  interesting is the US drinks. I don't know if they went to to
• 12:12
  label on the Boston Beer Company.
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  So shows that this is, you know, a cannabis inspired, I'm sorry,
• 12:17
  not inspired of cannabis based drink.
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  Something but I. Don't know if you're going to
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  get there here Is this like, I don't know I'll I'll stay away
• 12:25
  from making. But it's interesting, right?
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  Is this the shape of think why? Because the amount of the Gen XS
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  and Gen Gen X Gen Z having some form of CBT cannabis experience
• 12:41
  now shifting it to being a drink.
• 12:44
  I don't know. Yeah, it, it is interesting.
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  There's definitely, there's been a huge wave in the past couple
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  years, honestly since kind of coming out of COVID, where a lot
• 12:52
  of people maybe went down the alcohol rabbit hole, maybe too
• 12:58
  much. You know, everyone had their own
• 12:59
  COVID experience. I wouldn't comment.
• 13:01
  I wouldn't say from, not from experience.
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  Not here to judge. I'm also not I'm also not, you
• 13:07
  know, a sober person, but the, you know, the sober movement is
• 13:11
  sober. Curious that California's sober
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  there all these terms where it's just it's not as appealing to
• 13:19
  have alcohol in the younger generations now.
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  So it is really interesting to see there they might want
• 13:25
  something, maybe it's a 0 proof drink, so they aren't just
• 13:29
  standing there with water in their hand.
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  But then again, there there might be something like, you
• 13:35
  know, CBD has been around obviously for quite some time,
• 13:38
  infused drinks, but cannabis drinks that in the states,
• 13:43
  obviously 50 states, 50 different laws.
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  And that has been probably a harder nut to crack because the
• 13:49
  distribution have to be 21. You have to, you know, it's,
• 13:53
  it's, it's kind of it's a new category, which and so it's,
• 13:57
  it's really interesting. And also, if you don't know
• 14:01
  tolerances and you pull it off the shelf, you know, that's a
• 14:05
  whole new thing as well because it, it might hit a bit
• 14:09
  differently than some of the other cannabis products out
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  there. So I think it's a really
• 14:14
  interesting model to follow and to watch and just see how big
• 14:17
  it's going to get. It's, I believe it's going to be
• 14:20
  huge, obviously. I think before we go into the
• 14:22
  last one and unconscious of time, basically all of the all
• 14:26
  of the things, all of the echoes, all of the signals that
• 14:28
  we're hearing is there's this massive seismic shift in the
• 14:31
  market. It's having impact on the way we
• 14:33
  drink, on the way we shop, on the way we review things, get
• 14:37
  inspired by things. But the the industry is shifting
• 14:42
  and changing with it. And I think that's the wonderful
• 14:45
  thing that the opportunity that you and I have are these new
• 14:48
  categories. People like warmer as we come on
• 14:51
  to the final story, you know, they are looking at these
• 14:54
  categories thinking how, you know, this new, it's not new IT,
• 14:58
  but newish tweens, this new in the new generation.
• 15:03
  How do we stay relevant to them? And where's the white space?
• 15:06
  I mean, Walmart has been really good at fashion the past couple
• 15:10
  years. I mean, Denise and Candela
• 15:12
  running their fashion programme has been, you know, she came
• 15:14
  from luxury and it, I remember very clearly when she moved over
• 15:18
  to Walmart, it was, you know, when she tells the story, mouths
• 15:21
  were dropping like what? Why?
• 15:23
  And a lot of it is like just democratised fashion.
• 15:25
  And, you know, they really went for the women's customer 1st and
• 15:29
  then obviously kind of the baby and the kids.
• 15:32
  But there's been a real hole in the markets for when you're out
• 15:36
  of kids sizes but you're not into men's or women's sizes.
• 15:40
  What happens if if even if you kind of fit into the men's or
• 15:43
  women's clothing, A, they're not cut right, Maybe for the shape,
• 15:47
  But B, I mean, I don't have daughters myself, but I hear
• 15:51
  from all of my friends, I don't want my daughter wearing a crop
• 15:54
  top or shorts that are so short to school at age, you know, 11.
• 16:00
  Just because she's tall doesn't mean she should be wearing.
• 16:03
  So there's really been this very hard, like they want to be
• 16:07
  trendy. They want to be look like
• 16:09
  they're, you know, a teen and they want to look cool for their
• 16:12
  friends. But there hasn't really been a
• 16:14
  whole lot of brands that have stayed in this space.
• 16:17
  Some have come and gone, but with Walmart launching Weekend
• 16:20
  Academy, I think, you know, it's a perfect timing.
• 16:24
  We were just talking about back to school and Target, but you
• 16:26
  know, look at some of this stuff.
• 16:28
  It's. Well, it's not full of cut, it's
• 16:30
  not cutesy, cuddly mumsy. You know that sort of that's
• 16:34
  what my little, you know, 10 or 11 year old doesn't want right.
• 16:38
  But his body when when I go into the stores, that's what I get
• 16:42
  you just. Get a bigger.
• 16:46
  It's really nice. It's appropriate clothing for
• 16:49
  parents who, you know, still have the influence that are
• 16:51
  holding on to that influence. I know I won't have it much
• 16:54
  longer, but yeah, really, really excited to see how this goes.
• 16:58
  And, you know, it's priced. There's a lot below $10.
• 17:01
  I think the most expensive is somewhere in the. 12 bucks for a
• 17:05
  skirt or 698 for a T-shirt. I mean that's incredible.
• 17:10
  I mean that's team pricing, right?
• 17:11
  That's see that's that's where that.
• 17:13
  That is exactly. And they have the backpacks and
• 17:15
  all the things, the purses, the coats, all the things to go with
• 17:18
  it, which may be a little bit above $15.00, but still you're
• 17:22
  not. I don't want to take my kid
• 17:24
  into, you know, a Nordstrom's or Macy's and spend $60.00 on a
• 17:28
  shirt they're growing out of in two weeks, so.
• 17:31
  Absolutely. It's a really, really lovely
• 17:33
  play and I'm just excited to hear kind of the results of how
• 17:36
  they do. Well, listen, this has gone
• 17:40
  flown by, but we're we're at the top of our allotted slot.
• 17:44
  So thank you so much Jill for this weeks 5 things Friday.
• 17:48
  Until next time.